Money that it costs you something to keep. You pay a small amount of interest on it per period, such as 1% a month, typically in the form of a stamp placed on a piece of scrip. So it is also called stamp scrip, and it was devised in the late nineteenth century by the Argentinian economist Silvio Gesell (1862-1930). It was supported by Keynes in his General Theory, and has many adherents now as a better alternative to the global capitalist money market.

The purpose of negative interest money is to keep the money in circulation and doing and creating things, instead of selfishly hoarding it. Inflation can be reduced and productivity and employment increased.

It has been tried numerous times around the world, in the form of a local currency operating parallel to a national one. About 300 American towns used it in the 1930s. One of the most successful uses of negative interest money was in the Austrian town of Wörgl between 1932 and 1934, initiated by the splendidly-named mayor, Michael Unterguggenberger. The experiment was stopped only by the central bank of Austria becoming alarmed that they were losing their monopoly on printing money. Banks have always been hostile to the idea.

Log in or registerto write something here or to contact authors.